- After significant gains in 2023, markets collapsed earlier this year
- The S&P 500 index tracks the 500 largest companies in the USA
- All three major averages now appear to be in positive territory for 2024
The S&P 500 closed at an all-time high on Friday, its first record close in more than two years.
The index, which tracks the 500 largest companies in the U.S., rose 1.23 percent to 4,839.81, boosted by soaring technology stocks and optimism that the Federal Reserve will soon begin cutting interest rates.
It marked the benchmark index's first high since it closed at 4,796.56 on January 3, 2022.
The Dow Jones Industrial Average also gained 1.05 percent, or 395.19 points, and the Nasdaq gained 1.70 percent.
All three major averages now appear to be in positive territory for 2024 after the market stalled earlier in the year.
The S&P 500 closed at an all-time high on Friday, its first record close in more than two years
After significant losses in 2022, markets recovered in 2023 – the S&P 500 rose 24 percent.
The so-called Magnificent 7 technology companies – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla – accounted for around two-thirds of the increases.
But after the S&P 500 hit a record late last year, Wall Street started 2024 with a slump as several technology stocks experienced sharp declines.
Concerns about iPhone sales led analysts to downgrade Apple's stock price, causing Apple's stock price to fall and weighing on the U.S. stock market.
But in recent days, investors have returned to buying leading technology stocks.
All three major averages now appear to be in positive territory for 2024 after the market stalled earlier in the year
Chipmaker stocks in particular rose on Friday on booming demand for high-end artificial intelligence chips. Nvidia rose 4.2 percent and Advanced Micro Devices rose over 7 percent.
Microsoft and Apple, the world's two most valuable companies, both rose more than 1 percent.
The rally was also driven by expectations that the Fed could start cutting rates as early as March following its aggressive rate hike campaign.
While investors are divided, traders in the Fed funds futures market now see a 52 percent chance of a rate cut in March, according to CME Group's FedWatch tool.
The rally was fueled by optimism that the Federal Reserve will begin cutting interest rates this year
Stock investors also enjoyed Friday's preliminary survey from the University of Michigan, which showed consumer sentiment improved in January to its highest level since summer 2021.
“Records are made to be broken, and the expansion of market activity in recent months is reassuring,” said Carol Schleif, chief investment officer at BMO Wealth Management.
“The resilience of the U.S. economy in general and most businesses in particular has been remarkable.”